I think everyone here that has shopped for a hybrid has seen MSRP prices or higher and generally with a waiting list. Few if any dealers have them on the lots ever.

So the question is, why does demand so far outstrip supply?

I have some theories but I cannot prove anything. So if what I'm saying is not true, nobody should be shocked. I'm hoping somebody can link to real facts and/or a study with answers.

First, perhaps the battery packs are expensive and difficult to make in any quantity. Perhaps the Nickel in the NiMH batteries gets really expensive if you buy it all up to make a real supply of hybrids. NiCd technology has been around a long time but this is probably the first use in such a big block. Aside from the battery, there seems no other special parts that should cause a supply problem. Everything in the electric motors is probably a common material.

The other theory is that the marketing people believe we will not buy them without federal and state tax deductions / credits and those credits run out after they sell a certain amount. By creating the artificial supply limitation, then they can not only continue to sell the car year long with the tax credit, the dealers can also gouge us for full MSRP. If I was not somewhat passionate about alternatives to gasoline engines, no WAY would I buy a car at MSRP.

Has anyone seen a credible explanation from the dealers or industry experts? I would love to read it.

Word is that the battery packs are in short supply, answering the supply question. Demand is clearly being generated by high gas prices.

In 2001, GW took office and defunded Al Gore's "high mileage vehicle" program for the hydrogen fraud. All of the major US manufacturers had proposed designs and the next logical step was Federal fleet buys to get the production lines started. Heck, even GM had an interesting hybrid that used hydrolics and a nitrogen chamber for regenerative braking. But that all stopped the day GW took office. But Japan Inc. "didn't get the memo."

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Here is a news link from Yahoo! this AM regarding hybrids in short supply. Looks like toyota has reallocated some parts for their camry hybrid production.

http://news.yahoo.com/s/usatoday/200...ceshybridsales

Any large industry is hesitant to roll out mass quantities of ANY new technology until the case is convincingly proven that demand exists and will continue to exist. This is particularly true of incumbent market leaders- the US companies. Smaller companies or those thirsty to overtake the leaders are more willing to hang more risk on the proverbial limb- that's the game of capitalism. You can't beat the incumbents by copying them- the best you can hope for that way is parity. So you must do something different- higher quality, hybrids, etc.

Demand only recently spiked within the last 1-2 years, well within the product lifecycle of the most recent generation of most models. The auto industry is particularly burdened with longer development and lifecycles- normally it takes 2-2.5 years to re-design a car from the ground up, and once its redesigned, the preference is to get at least 5 years out of it before the next cycle. Even a modest change to a vehicle takes more than a year to design and execute. So it really takes a lot of proof from the business side to justify swinging momentum and resources to a new area. That's just occurred.

Give the market time to react. Demand always outstrips supply when a new widget comes along that turns out to be a winner. By the 2008 and 2009 model years we'll be awash in hybrid versions of current vehicles from almost every maker. That is exactly the cycle time of the industry after it decides to shift momentum in a new direction- about 2.5 years ater 'hybrid' became a truly hot word.

Even once a product is rolled out, it still takes substantial time (years) to truly scale up production, shifting resources away from the 'old' cash cow that has a built-in advantage as the incumbent money-maker. Hence the existing perceived shortage of HCHs and Prii.

And yes, Toyota is hardly a small guy trying to gain a foothold. But look at what they are also expanding in rapidly- V8 trucks and SUVs. They too hedged their bets, just with somewhat different relative weighting.

Correct me if I'm wrong, but all the hybrids are using NiMH, not NiCd batteries, right?

The HCH2 is manufactured solely at the Suzuka, Japan, factory. Divide their output by however many countries around the world are getting the cars. (Rumor has it that they'll start manufacturing them in the US sometime this fall.)

I think the companies can't really figure out how much to increase production, because every time they ramp it up, demand swallows it.

yes. NiMH. And most NiMH technology patents are controlled by a single entity (Cobasys)- hence the search for the perfected Lion battery at good cost.

In 2004 when GM was advertising the H2 nonstop and the Prius II was just coming out, I said many times to many people that if you gave me the advertising budget GM spends on the H2 to advertise the Prius, I could sell twice as many Priuses (Prii? Priae? **** declensions) as H2s (if they could've been built).

I don't take a passive view of the "market" and the "demand" for any product in the society we live in. A truly epistemological question today is, how do we know what we like? Marketing is a science, and given enough money, there really aren't a lot of marketing failures anymore. Think of all the crappy music (of any genre) that can be sold -- with the right marketing -- as an example. Or movies. It's getting harder for movies to make money when they suck now that people can instant message or text message or call people who are standing in line to buy tickets after coming out of a movie to tell them how bad it is. Yet, with enough money spent on hype, terrible movies still limp along at the box office when they never should've gotten there to begin with.

You can sell anything if you spend enough money on advertising it.

All of this is to say that the Big 3 CEOs sat around whining about there not being a market, and Toyota and Honda said screw it, we're going to make a market. And I'll bet they haven't spent as much money advertising any of the hybrids that are currently available as was spent on the H2. But I'd love to see a comparison of the ad budgets for all of them.

edit: I can't believe this site edits the word d a m n

All of this is to say that the Big 3 CEOs sat around whining about there not being a market, and Toyota and Honda said screw it, we're going to make a market. And I'll bet they haven't spent as much money advertising any of the hybrids that are currently available as was spent on the H2. But I'd love to see a comparison of the ad budgets for all of them.

This was and still is the truth. The others except Toyota and Honda have dragged kicking and screaming to the party. I think rather than 'creating' the market - since as you note correctly there has been very little in the way of mass advertising of the Prius/HSD/Honda hybrids until recently- that Toyota and Honda just dug deeper and found this nugget that had been there waiting to be found.

Another even 'huger' hugget was the Crossover SUV which Toyota discovered in the Lexus Rx300. That followed by the Highlander created an entire new line of vehicles. It was nearly 10 yrs until many others had their own car-based SUV's.

Good marketing

Tell that to Ford Motor Co. The Edsel was the most heavily advertised car in automotive history -- and the biggest flop. And I see very few H2's on the road, despite all the alleged hype. Right now the H3 is getting the lion's share of Hummer ads, and it's still a rarity as well.

The fact that demand for hybrids far outstrips supply, despite almost zero advertising, shows the real limits of those so-called marketing "gurus."